Monday, September 2, 2013

The Often Overlooked Factor of Customer and Product Development

Product
Emotions: The way to captivate customers

When
businesses think about innovation, most think about technology
innovation. Their innovation efforts and product development
processes focus on new technologies, new capabilities, new functions,
efforts that are seen as important to the future of the company.
Yet what the business ultimately wants is to captivate the
marketplace, because when customers are captivated by a product, the
business gets higher margins instead of further cost cuts.
Customers become not simply loyal purchasers, but passionately
committed to that product and company. That passionate customer base
then generates the word-of-mouth that is so critical today.

“There
are actually two dimensions for successful innovation: functionality
– what products do, but also emotion – how products make
customers feel.”

Despite
the importance of technological capability, technology is only part
of what it takes to captivate customers. There are actually two
dimensions for successful innovation: functionality – what products
do, but also emotion – how products make customers feel.
Customers require both if they are to be engaged with a product.
While companies have a process to develop and deliver technology and
functional capabilities, they lack a process to develop and deliver
emotion in a product. In Built to Love – Creating Products
that Captivate Customers we introduce a process for that second
critical dimension, the emotion that a product engenders.

Opportunities
for product emotions

To
understand why emotion is critical, consider two business-to-business
products: a long-haul truck, and a service to analyze and map out the
condition of a sewer system. Our choice of these products is to
illustrate that emotion is important in all types of industries, even
where one would typically consider them irrelevant such as for
business-to-business products, whether those products are physical
(such as the truck) or are services (such as the sewer service).
Built to Love describes opportunities for product emotions within a
variety of products and industries, including consumer companies and
software companies.

Long-haul
truck drivers have a tedious job, extended hours on the road.
Their task is to move products long distances overland, lengthy trips
that require multiple days or more away from family and friends.
Their primary tool in the industry, the truck itself, effectively
accomplishes the role for which it has been designed, to not only
move the product but also to provide certain essentials to the driver
such as a place to sleep. Drivers live in their truck cabs,
sleeping, trying to relax and eat in a minimal floor space about the
size of a two-person tent, where the bed fills most of that space.
With engines that last for hundreds of thousands of miles, and a
living space that allows the driver to get enough sleep to get on the
road again, long-haul trucks are effective business tools,
efficiently transporting goods between cities,year after year.

Yet
while the long-haul trucks have been designed to solve the functional
need to move products throughout the nation, there is a deeply human
need of drivers that remains overlooked, unmet, unaddressed.
Many drivers own their own trucks and are thus small businessmen, yet
society does not view drivers to be on the same professional level as
other small business owners and entrepreneurs. The truck driver
lacks the respect of most professions, and there is not only a social
argument but also a business argument for addressing this need.
For example, large trucking fleets in the U.S. have over 100%
employee turnover per year. The typical truck fulfills part of
the business opportunity of transporting goods, the functional need
to move products. Yet there still remains the opportunity to
fulfill a more deeply human need of drivers, to provide them with a
feeling of dignity and the sense of professionalism.

As a
different example of an emotion-based business opportunity, about 150
feet below our cities will be found the deep sewer system, five foot
diameter pipes that accumulate the sewerage and transport it to the
processing plant. Because the pipes are old, some deep system
pipes have begun to deteriorate or debris has started to build up as
well, threatening the environmental damage of major sewer leaks or
blockages that lead to sewage backups into our offices and homes.

Regulatory
agencies are putting the pressure on municipalities to repair failing
systems – and to know when their systems will fail. Although the
deep sewer system pipes are difficult to inspect, robotic and other
technology does exist to repair identified problems in these
systems. Even so, for the city managers responsible for these
systems, the problem is not one of repairing known problems, for
typically they do not know whether or not the pipes have deteriorated
to the extent that they are in need of repair – and that is the
problem. If they knew of specific sewer problems, city
managers would want to quickly address those problems because unseen
problems can become major headaches. So the city managers’
lack of knowledge about the state of the system pipes leaves them
with a constant, nagging background worry about the sewer. Thus
there is a business opportunity here, to alleviate this persistent
worry of city managers.

In both
of these cases there are quality, functional products available to
meet the business task. Long-haul trucks are effective business
tools, able to efficiently bring goods between cities with high
quality engines that last for many years of work. Robotic and
other technology exists to rehab deteriorating sewer pipes.
However, both of these solutions are insufficient to meet the broader
set of desires of the customers. Both the trucker and the city
manager seek not just high performance but also high emotions as
well. They need products that don’t just do the right things
but also make people feel the right ways.

Leveraging
product emotions

In our research, we have found that people will pay for products that
address their emotional needs in all types of businesses including
long-haul trucking and sewer system management. We have also
studied the profitability of companies that consistently deliver
high-emotion products. In Built to Love we present the results
of tracking a stock index of consumer-identified high emotion
companies. In good times the index returned ten times the
averages of the standard indices. But in recent bad economic
times it still significantly outpaced those indices. Even
during economically difficult times, it turns out that people will
pay for product emotions, boosting the success of the companies that
provide them and therefore of investors in those companies. It
turns out that at least 84% of investors would have been better off
if they chose the high emotion index of standard stock investments.

“Even
during economically difficult times, it turns out that people will
pay for product emotions, boosting the success of the companies that
provide them and therefore of investors in those companies.”

Emotion,
then, not only provides strong benefits to the customer but to the
company as well. The challenge is how to design for emotions.
How do you create a product that engenders the strong emotions your
customers seek? There are thousands of emotions, hundreds that
we have put names to in our language, emotions like joyful, assured,
reliable, guilty, honest and happy. In our work we identified
130 emotions that are specifically relevant to how people feel when
they are using a product. Many of these emotions are subtly
different but related, and they can be grouped into categories.
The result is 16 emotion categories, a set that enable a broad
consideration of emotion-based product design. These emotion
categories are listed in Figure 1.

Figure
1 captures the span of emotions that people feel when using a
product.

“Knowing
and understanding the product emotion categories will allow you to
assess the emotions that your company and products currently evoke,
those that your competitor’s products evoke, and the product
emotion categories serve as the basis to craft your product emotion
strategy.”

Knowing
and understanding the product emotion categories will allow you to
assess the emotions that your company and products currently evoke,
those that your competitor’s products evoke, and the product
emotion categories serve as the basis to craft an actionable plan to
provide the emotions your customers seek: your product emotion
strategy.

Current
product emotions—What emotions do your company’s products evoke
to customers today? Understanding the current set of product
emotions is a critical first step, for managing them requires knowing
what they are. Quite possibly your product delivers some emotions
that your company does not intend. Maybe some of these emotions
are undesirable to your customers. For example when Western
companies attempted to upstage existing rice cookers in Asia, they
provided high tech multifunctional and computerized versions that
made not just rice but other foods as well, with layers of non-stick
coatings for convenient clean-up. Yet these companies had not
properly researched and understood product emotions. When they
entered the Asian markets, customers felt these intruding devices to
be disruptive, confusing, and even unsafe.

Competitors’
product emotions—What emotions do your competitors’ products
evoke? Maintaining your differentiation requires you to understand
not only your own products but also those of your
competitors.Product emotion strategy—If companies have product
strategies, they are generally function based, often based on a
technology platform. A product strategy dictates the
fundamental interaction between a company and its customers, defining
the relationship between the company and its customers. Yet
many companies miss the opportunity to gain long-term commitment from
their customers by addressing their emotional needs. Apple is
the iconic company that consistently delivers high emotion products.
If their strategy was narrowly based on technology
platforms–computers–would they ever have created the iPod or
iPhone or changed their name from “Apple Computer” to just
“Apple”?

Keep in
mind that Figure 1 lists categories of emotions, and your analysis of
your products and your strategy for emotions will be specified with
particular emotions from these categories. Note that not all
emotion categories are relevant to a product, so the analysis will
explore the ones that are relevant to your industry, company, and
products. These specific emotions and the resulting strategy are
rooted in an understanding of your customers, your company, and your
company’s competitors.

In
Built to Love they introduce a tool called the eMap based on these
categories. By using the set of emotion categories within the
eMap, the current state of your product and your competitors can be
compared, and your emotion-based product strategy can be set for
products under development to achieve a necessary level of emotions
that customers find important and fulfilling.

Executing
the product emotion strategy

Once
the emotion-based product strategy is completed the goal is to make
it actionable through the development of products, conveyors of value
from company to customer. The products will deliver the
emotions specified in the strategy through touchpoints – any points
of interaction between the user and product. The result is a
process that begins by identifying emotions that customers seek and
ends with a product that meets those desires, advancing the
connection of the company with the customer while extending the brand
and reputation of the company within current and potential customers.

If we
consider again the long-haul trucker living in a drab truck, what
emotions does he feel and which would he really like to have
fulfilled? He feels irrelevant, uncared for, and lonely.
He would like the respect that other hard working people feel, the
dignity that comes from those living in houses or staying in hotels.
Truckers want to be proud and honorable, yet unique, confident and
self-assured. The emotion categories of content, proud and
confident are some of the important categories that capture these
emotions and set the strategy for Navistar’s International
Truck brand to “challenge convention” in their industry.

To
execute their strategy, Navistar’s International Truck developed
and introduced LoneStar, a paradigm-shifting truck that uses
future-retroism characteristics in the external styling to engender
pride and bold confidence for the driver. Inside the cab,
behind the driver’s seat where the driver lives, the truck
engenders respect and dignity with a couch to relax in, a table to
eat and work at, a kitchenette to prepare a healthy though modest
meal, a fill size Murphy bed to get a good night’s sleep, and
hardwood flooring, just like they might have – or want to
have – at home. LoneStar not only delivered the emotion
strategy to its customers, but it reformulated the company’s
perception in the industry as a leader with exciting products, a
company to watch in the future.

As for
the city manager worrying about the city’s sewer system, she or he
seeks services that engender confidence in the results, validation
for determining the physical condition of the sewer pipes, and the
pride of being a thought leader for choosing to do so. Pride,
independence and confidence are some of the emotion categories
critical to RedZone Robotics, a small company with leading-edge
robotics technology, that lead to such emotions and an emotion
strategy based on these and other key emotion insights: “Customers
should feel confident in their new information, validated in using
RedZone’s service, thought leaders for committing to this new
paradigm, well cared for by the company, and connected to the
company, its new technology and the infrastructure that RedZone
maintains.” Note that RedZone’s resulting product strategy
is not independent of technology; such technology is critical to the
success of the services that it provides. However, technology
is considered in the context of the emotion it engenders to deliver
the service and not the focus of the company’s product offerings.

To
execute their strategy, RedZone Robotics developed a service using
their unique robotic technology to map out sewer systems and deliver
detailed information to the city manager, alleviating the nagging
worry. Prior to RedZone’s service, inspection of the sewer
system was difficult at best: a sewer system could be turned off for
only a short amount of time before upstream buildup occurred; or
people donned in diving gear could go down to inspect the systems –
an undesirable and dangerous endeavor. RedZone changed the
paradigm. In one instance a regulatory agency told a
municipality that they needed to build a temporary parallel sewer
system to divert the sewerage to while the main system was inspected
and possibly repaired. Instead RedZone proved that the system
was intact and did not require repair, saving the municipality $2
billion, validating the engagement with the company and certainly
making that city manager feel like a thought leader.

Emotion
is critical to the long-term success of any product – physical,
service, software – that customers interact with directly or
indirectly. Prior to focusing on their emotion strategy,
Navistar’s product strategy was to be the low cost provider,
fighting hard to derive acceptable margins. Without the emotion
strategy there would be no LoneStar and no rejuvenation of the
company. Prior to the emotion strategy, RedZone was focused on
the functionality of what it could do – rehab sewers – struggling
without business traction. The emotion strategy refocussed the
company on services that met emotional needs, growing the company
from 7 to 70 employees with significant business contracts.

“From
consumer companies like Apple to business-to-business companies like
Navistar and RedZone, emotion is the differentiator and the enabler
of higher margins, loyal customers, and reputations for leading
products.”

From
consumer companies like Apple to business-to-business companies like
Navistar and RedZone, emotion is the differentiator and the enabler
of higher margins, loyal customers, and reputations for leading
products. This article was a start, a means to start you
thinking about how to embrace emotion as a way of creating products.
Much more information and tools such as the eMap can be found in
Built to Love. However you do it, engage emotion as a partner
to technology as a means for delivering the next marketplace products
that captivate customers.

About
the authors

Globally
known for their rigorous and effective approach to product
innovation, Professors Peter
Boatwright andJonathan
Cagan collaborate
in corporate consulting, research on innovation processes and tools,
teaching and leading innovation teams, and speaking engagements on
the topic of innovation. On the faculty at Carnegie
Mellon University,
Peter Boatwright is an Associate Professor of Marketing at the Tepper
School of Business with an appointment in the Department of
Mechanical Engineering (boatwright@cmu.edu) and Jonathan Cagan is the
George Tallman and Florence Barrett Ladd Professor in the Department
of Mechanical Engineering with appointments in Schools of Design and
Computer Science (cagan@cmu.edu). Boatwright and
Cagan actively consult with companies ranging from Fortune 100 to
entrepreneurial start-ups, with a focus on product strategy and
innovation as well as brand strategy. Their formal approaches
to opportunity identification and problem solving have been
integrated into a diverse range of companies; they also co-lead
executive training sessions.At Carnegie Mellon, They co-teach
practice-based courses in product innovation. They also actively
collaborate on research in innovation methods and have co-authored
two books: Built
to Love – Creating Products that Captivate Customers and The
Design of Things to Come – How Ordinary People Create Extraordinary
Products.

No comments:

Post a Comment

Please like me on Facebook.

Search This Blog

An English blog about Krakow Startup

Hello readers, My name is Paul Chen and welcome to K’Sup. My goal is to provide you an English language based blog on the events as well as highlight some of the enterprises who are trying to get their spot on the map as well as to archive the on-going activities at the same time do some trend-spotting. I hope you will find K’Sup both informative and inspirational. The name K’Sup is a combination of K for Krakow and S for start and UP. ‘Sup is colloquial for what’s up in American slang.